The good news is you’re not
alone, as most of the betting parlors got it wrong as well.The bad news is that many people have not put
this event behind them.Police officers
are being shot by ‘distraught’ Hillary fans.Corporate CEOs are being fired for saying that they are going to KILL
Trump.And just this week Jill Stein
(the Green Party’s nominee for President) announced that she had raised $5m to
recount the ballot boxes in Wisconsin, Michigan and Pennsylvania.

When Trump won, my very
first thought was: “This ain’t over". I remember when Jill Stein (on
October 12th) said: “A vote for Hillary is a vote for
War".I guess that Ms. Stein
(within a couple weeks) went from being afraid of Hillary – to praising
her.She also put up a web site,
proclaimed that the voting machines were hacked, and raised enough money to
recount the votes in 3 states.

If they ‘find’ an extra
couple hundred thousand ballots for Hillary, can they actually pull the win
away from Trump?I don’t know that
process, but it certainly looks like they're going to try. And what about
the financial ramifications?After all,
the market has been soaring on the idea of Trump cutting taxes and raising
infrastructure spending.Hillary wanted
to RAISE taxes.I think if the election
results were reversed, we would see a 20% market pullback – eliminating all of
the post-election gains and then some.I'm not saying that this is going to happen, but the website, the
donations, and the hard push from the left to take back the country are all
real.

Maybe this will all fizzle
out and calmer heads will prevail, but with $5 million being raised in a couple
weeks to meet the requirements – this is pretty scary stuff.

The Market...

As SF reminded me:

-The US economy
and inflation have grown an average of 2% per year for the past 16 years.Unfortunately, our debt has risen almost 350%
faster than our economy – at a 6.8% annual rate.

-Under President
Obama, Government debt levels have doubled, unfunded liabilities are over $100
Trillion, and our debt to GDP ratio has grown to almost 121%.

-Private and
business debt is over $67 Trillion, and over 400% of GDP.

-And lest we
forget, out of the 300M total U.S. population: 95M are missing from the labor
force, 2M people are in prison, 43M are living in poverty and receiving food
stamps, 57M are Medicare enrollees, 73M are Medicaid recipients, and 31M are
still without health insurance. Source: www.usdebtclock.org

All of this debt is
unsustainable, and can’t be paid back.The American people want: jobs, tax cuts, a balanced budget, low-cost
education, and universal healthcare.But
it’s not clear how we cut taxes and achieve a balanced budget.Or how we increase the defense budget,
maintain Medicare and Social Security, and address healthcare, welfare and
immigration – without boosting our debt to ridiculous levels.

After all, Trump is
proposing to cut the corporate tax rate from 35% to 15%.But corporations (with deductions) already
average around a 17% tax rate.So, going
from 17% to 15% will not make all that much of a difference in corporate
earnings.This is especially true given
the fact that corporate earnings (since 2012) have only grown by 2.6% per year,
and Wall Street (using current stock prices) is projecting a 2017 earnings
growth rate of over 20%.Excuse me, but
I really don’t see anything close to 20% earnings growth in the 9th
year of an economic expansion, with the dollar strengthening, and inflation
rising.

Trump also promises massive
increases in infrastructure and military spending.Thanks to Chris Wiles of Rockhaven Capital
Management for putting together the following graphics showing how $2.63
Trillion of ‘Mandatory Programs’ will be allocated.And since Trump didn’t mention any cuts, it’s
safe to say that this pie isn't decreasing any time soon.

And then there is Trump’s
$1.15 Trillion budget for ‘Discretionary Programs’.The military accounts for 54% of
discretionary spending, and if that increases along with infrastructure
spending – it’s safe to assume that the entire ‘discretionary’ spending pie
will also get larger.

The current budget deficit
is about $616B, and will only grow larger with increased spending and
additional tax cuts.Oh, let’s not
forget that interest rates are
beginning to rise.

As for the immediate stock
market direction, what in the world is going on?How long will this ‘low volume – melt-up’
continue?The market is moving higher
strictly on the ‘hopium’ of Trump creating a monetary explosion. Day
after day, the volume of stock market transactions goes down, all the while
stocks are moving higher. A healthy
market has stocks moving higher on increasing volume – showing the world that
more and more people are bidding and coming into the marketplace.Stocks moving higher on lower volume, means
that people continuing to leave the party.Some red flags to this market are:

-The markets have
broken through major resistance levels and moved higher - institutional
participation has been lacking.

-Excessive
bullishness by the financial media.

-Retail investors
are becoming more bullish, and are beginning to chase an already over-bought
market.Historically this is a sign that
the end is near.

-The smashing of
bonds (as yields spike) along with the continued pullback in gold, and emerging
markets is a huge red flag.

-And FED
Chairperson Janet Yellen making it clear that she will raise rates in December
– should serve as a large dose of caution to the markets.

Veteran trader Mark Cook
sees the market moving higher from here, but not by much.“I think we are going to see a lot of
inflation.The way that Trump is wired
is that inflation is beneficial.The
stock market doesn’t like inflation.During the Reagan years, after the election there was a huge rally, only
to go down substantially once he got into office.The table is set for quite a correction for
2017.”And a well-known market
forecaster Tom DeMark is predicting
as much as an 11% decline for the S&P: “If there is going
to be a plunge, it should happen within the next two or three weeks.”

There was supposed to be an
OPEC meeting on November 30th that would include some non-OPEC
nations as well.They were trying to
(once again) get some oil production cuts in place – in order to push oil
prices higher.As recently as today,
Saudi Arabia suggested that the meeting may be on hold as they make sure that
all of their own OPEC members are on board with the production cuts.I suggest that even with Iraq and Iran
balking at the idea, we will get some sort of a deal this week.This OPEC announced deal should strengthen
the oil market, and extending the overall market ‘melt up’.If the meeting does not happen, then oil will
fade and put a dent in the mindless romp higher.

Also, the impending voter
recount in 3 states could derail the markets.

The last situation that
could put a pause in the markets is the December 14th FOMC meeting.At this meeting, the FED will announce that
they will raise interest rates ¼ of a point.I fear the ‘buy the rumor, sell the news’ scenario.In other words, even though a rate increase
is widely expected – I’m looking for the markets to pullback when the FED
actually does it.

One thing is certain, just
14 sessions ago the S&P stood at 2083 – barely hanging on to its 50-day
moving average.Friday, we closed 130
points higher at 2213. That pace reminds me of 1999, and NO it can’t go
on forever.So, if OPEC announces a deal
on November 30th, our market will climb higher, and I would start to
lighten up ahead of the FED meeting on the 14th of December.If OPEC does NOT come away with a deal, I
would begin to lighten up, and want to be out of almost all trades by the time
the FED meeting rolls around.

Tips:

History tells us that every
single time for the past 100 years, whenever there has been a change from a
2-term President – the economy fell into a recession 6 to 12 months
later. History also tells us that every single U.S. recession (except for
one with explainable circumstances) occurred around an election.So, between the history of revolving
Presidents, and the that fact that only 1 time has the market run for longer
than this current expansion – odds say that this isn't a new leg higher, but
rather a blow off top and the beginning of a market decline.

To follow me on Twitter.com
and on StockTwits.com to get my
daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

Disclaimer:

Expressed thoughts proffered
within the BARRONS REPORT, a Private and free weekly economic newsletter, are
those of noted entrepreneur, professor and author, R.F. Culbertson,
contributing sources and those he interviews. You can learn more and
get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com>.

Views expressed are provided
for information purposes only and should not be construed in any way as an
offer, an endorsement, or inducement to invest and is not in any way a
testimony of, or associated with Mr. Culbertson's other firms or
associations. Mr. Culbertson and related parties are not registered
and licensed brokers. This message may contain information that is
confidential or privileged and is intended only for the individual or entity
named above and does not constitute an offer for or advice about any
alternative investment product. Such advice can only be made when accompanied
by a prospectus or similar offering document. Past performance is
not indicative of future performance. Please make sure to review important
disclosures at the end of each article.

Note: Joining BARRONS REPORT
is not an offering for any investment. It represents only the opinions of RF
Culbertson and Associates.

PAST RESULTS ARE NOT
INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY
FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE
INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS
INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT
PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME
REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY
CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE
INVESTMENT MANAGER.

Alternative investment
performance can be volatile. An investor could lose all or a substantial amount
of his or her investment. Often, alternative investment fund and account
managers have total trading authority over their funds or accounts; the use of
a single advisor applying generally similar trading programs could mean lack of
diversification and, consequently, higher risk. There is often no secondary
market for an investor's interest in alternative investments, and none is
expected to develop.

All material presented
herein is believed to be reliable but we cannot attest to its accuracy.
Opinions expressed in these reports may change without prior notice. Culbertson
and/or the staff may or may not have investments in any funds cited above.

Sunday, November 20, 2016

Approximately one week ago
today, the world woke up to a Donald Trump victory.Since then, the world has changed in ways I
could have never imagined:

-The stock market
(which was supposed to crash) put on a run not seen in a decade.

-One phone call
between Trump and Putin has cut our Defcon Level back to the safest level there
is: 5.

-Cities are
experiencing riots and violence not from ‘Right Wing’ extremists, but rather
the ‘Tolerant Left’.

-And the main
stream media (armed with their 7% public approval rating) want to have
Facebook, Twitter and YouTube regulate and eliminate alternative news sites.

Factually, alternative news
sites breakdown into 2 categories: (a) those that are self-funded via
donations, memberships and paid advertising, and (b) and those that survive via
Google ad-words, Facebook and YouTube views.Infowars.com (for example) is self-funded, sells products, has
advertisers that pay real money for ads, and would be difficult for any ‘band
of elitists’ to shut down.On the other
hand, there are hundreds of little guys out there just reporting on the truth
as they see it.It’s these little guys
that need YouTube, Twitter and Facebook to gather an audience, and get paid for
their information.

Interestingly, YouTube just
rolled out their ‘YouTube Heroes’ program. People that sign-up as YouTube Heroes are
given access to a special ‘Heroes Dashboard’.YouTube then trains you on how to hunt, find, and ‘snitch’ on
‘offensive’ videos.The problem is: What
is offensive, and Who determines what is offensive?Could Hillary experiencing a meltdown be
offensive – certainly.Could Trump
preaching ‘Making America Great Again’ be offensive – absolutely.Unfortunately, snitches are going to dictate
what videos remain on YouTube and reap advertising dollars, and which ones do
not.Many of the little guys will be
forced to conform with YouTube’s ‘offensive’ definition, or go out of
business.The same is true with Google’s
‘fake news’ definition.

Mark Zuckerberg’s Facebook
is even worse as Mark personally has a track record of pulling the plug on
anything that doesn’t fit his personal agenda.The Telegraph recently said: “Facebook and Google have pledged to ban
websites that peddle fake news after the world's two most popular websites were
accused of spreading false and incendiary articles about the US presidential
election.Facebook has added fake news
websites to its list of bannings.”

According to the Daily
Caller, Twitter: “Has initiated a major purge of prominent accounts
associated with the Alt-Right exactly a week after GOP President-elect Donald
Trump's stunning electoral victory.Twitter went on to banish the accounts of over 2 dozen well known
alternative media members.”

So Facebook, Twitter,
Google, and YouTube have all taken it upon themselves to squash every ‘non-left
leaning’ website.And, there’s not a
darned thing any of us can do about it.The beauty of digital media used to be that anyone could present their
views to anyone else that might take the time to read or listen to them.I guess that’s a thing of the past.Well, it’s time to dust off the old
short-wave radio.

The Market:

The instant Donald Trump was
declared the President elect; all heck broke loose in the markets.The U.S. dollar, stock market, commodities,
and yields shot straight up. But metals (that were predicted to do the
same), have fallen like a rock.A year
ago, I laid out a call option play (in the metals) that turned $19k into $244k
in 7 months.The rationale started with
a Hillary Clinton Presidency, and her insistence on a hot war with Russia.But Donald Trump’s election, optimism,
non-war, strong dollar, unprecedented debt levels, and unbridled inflation –
will add another 9 months to this trade.Now that Ms. Janet Yellen has re-affirmed her decision to remain ‘on the
job’ until February 2018 – it seems that our FED is the only thing standing
between an economic meltdown and some form of normalcy.I continue to buy gold and silver because:

However, trading gold and
silver will remain sloppy until after the December FED meeting.Inflation in the new year will allow the
metals to rebound.

Trump’s proposed
infrastructure plan has helped fuel expectations of higher demand for
industrial commodities such as copper and steel.His plan will require an entire nation to
‘double down’, and believe that adding trillions to our current debt load is
the right move.Trump’s call for hefty
tariffs on Chinese imports, and proposed sanctions due to currency manipulation
will lead to massive inflation – hurting oil consumption and potentially
triggering a recession.Trump’s demand
for U.S. energy independence is expected to lead to a climb in domestic oil
production (fracking) in a market that’s already oversupplied. The U.S.’s ability to export surplus oil, puts
a $50/barrel ceiling on oil prices.And
coupled with OPEC’s inability to curtail oil production, will cause oil to be
trapped in the $35 to $50/barrel range.

Goldman’s 2017 forecasts are
below:

Factually last week:

-Retails sales
rose much higher than expected,

-Housing starts
jumped (an impossible) 25%. We have NEVER seen a 25% increase in housing
starts.

-Initial jobless
claims fell 8+%.We have NEVER seen that
large a decrease since 1970.How can
initial jobless claims be at 40 year lows when 96m people are NOT even in the
workforce?

-The CPI (a
measure of inflation) rose more than expected,

-Billions of
dollars left the equity markets again,

-Our FED is on a
course to raise rates in December, but over in Europe, Draghi has said that he
sees “QE for years to come".

-And the Saudis
and Chinese emerged as rabid sellers of U.S. Treasuries – reinforcing major
U.S. dollar strength and problems in all emerging markets.

Unfortunately, these numbers
do NOT ring of stability.For example,
as interest rates rise, housing prices will fall.Homes priced at $400k with a 3.5% mortgage,
are going to be re-priced at $325k with a 4.5% mortgage.And each time the U.S. dollar inches higher
on the world stage, it costs emerging countries more of their own currency to
service their debt – because their debt is priced in U.S. dollars.

But is the stock market
taking the proverbial ‘pause that refreshes’, or are we headed lower?Somehow over the past week: (a) Trump’s trade
policies went from being bad to perfect, (b) his idea of borrowing to build
infrastructure went from being horrific to ‘the golden road to glory’, and (c)
Instead of his cabinet appointments being beyond belief they went to beyond
reproach.If any of this bothers you –
you’re not alone.

November and December are
traditionally strong months for the stock market, and the S&P is just 9
points away from an all-time closing high.This seems like a trophy that Obama and Trump need to share.On the other hand, the market is never a big
‘fan’ of the FED raising interest rates.And despite all of the talk about ‘Making America Great Again’, there’s
no guarantee that Trump will even get half of what he wants.And then there's the idea that we've come too
far – too fast.

My sense is that they're
going to get their all-time highs, but that it won't last terribly long.If the December rate hike doesn't derail it,
all of the noise surrounding the inauguration will definitely put a damper on
things.After all, ‘the Left’ says that
they are going to bring a million people to ‘March on Washington’ and
disrupt things.If this were not ‘the
season’, I would be selling this market short in a heartbeat because of what
the credit markets are telling me.But
‘Tis the Season’ to be jolly – and to be careful.

Tips:

Because of Mexico being
‘beaten down’ as of late, some of you have asked me how to invest specifically
in Mexico.

-The easiest way
is to buy the Mexican ETF = EWW. Or you could focus on traditionally
strong Mexican brands such as:

Also, Warren Buffet just
announced his interest in the airline carrier market.To invest like Warren, you could look at
buying into the U.S Global Jets ETF = JETS that includes global airline
operators and manufacturers.JETS saw its
market value climb roughly 8.8% in the third quarter, and continues to be a lot
of investor’s top pick for 2017.

To follow me on Twitter.com
and on StockTwits.com to get my
daily thoughts and trades – my handle is: taylorpamm.

Please be safe out there!

Disclaimer:

Expressed thoughts proffered
within the BARRONS REPORT, a Private and free weekly economic newsletter, are
those of noted entrepreneur, professor and author, R.F. Culbertson,
contributing sources and those he interviews. You can learn more and
get your free subscription by visiting: <http://rfcfinancialnews.blogspot.com>.

Views expressed are provided
for information purposes only and should not be construed in any way as an
offer, an endorsement, or inducement to invest and is not in any way a
testimony of, or associated with Mr. Culbertson's other firms or
associations. Mr. Culbertson and related parties are not registered
and licensed brokers. This message may contain information that is
confidential or privileged and is intended only for the individual or entity
named above and does not constitute an offer for or advice about any
alternative investment product. Such advice can only be made when accompanied
by a prospectus or similar offering document. Past performance is
not indicative of future performance. Please make sure to review important
disclosures at the end of each article.

Note: Joining BARRONS REPORT
is not an offering for any investment. It represents only the opinions of RF
Culbertson and Associates.

PAST RESULTS ARE NOT
INDICATIVE OF FUTURE RESULTS. THERE IS RISK OF LOSS AS WELL AS THE OPPORTUNITY
FOR GAIN WHEN INVESTING IN MANAGED FUNDS. WHEN CONSIDERING ALTERNATIVE
INVESTMENTS (INCLUDING HEDGE FUNDS) AN INVESTOR SHOULD CONSIDER VARIOUS RISKS
INCLUDING THE FACT THAT SOME PRODUCTS AND OTHER SPECULATIVE INVESTMENT
PRACTICES MAY INCREASE RISK OF INVESTMENT LOSS; MAY NOT BE SUBJECT TO THE SAME
REGULATORY REQUIREMENTS AS MUTUAL FUNDS, OFTEN CHARGE HIGH FEES, AND IN MANY
CASES THE UNDERLYING INVESTMENTS ARE NOT TRANSPARENT AND ARE KNOWN ONLY TO THE
INVESTMENT MANAGER.

Alternative investment
performance can be volatile. An investor could lose all or a substantial amount
of his or her investment. Often, alternative investment fund and account
managers have total trading authority over their funds or accounts; the use of
a single advisor applying generally similar trading programs could mean lack of
diversification and, consequently, higher risk. There is often no secondary
market for an investor's interest in alternative investments, and none is
expected to develop.

All material presented
herein is believed to be reliable but we cannot attest to its accuracy.
Opinions expressed in these reports may change without prior notice. Culbertson
and/or the staff may or may not have investments in any funds cited above.

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